Comprehensive Annual Financial Report

Each year, the Village of Orland Park issues a Comprehensive Annual Financial Report (CAFR), audited by an independent public accounting firm that provides both summary and detailed information related to the Village’s financial health. The recently released CAFR for 2018 shows the Village continues to maintain a strong financial position, support a thriving economy for all of its residents and businesses, and attract shoppers and potential residents from surrounding communities, solidifying the Village’s reputation as an ideal place to live, work and play.

A number of factors help determine the financial health of the Village, two of the strongest categories being Orland Park’s reduced outstanding debt and its surplus of revenue relative to its expenses. In 2018, the Village was able to substantially decrease its outstanding debt while also bringing in more money than it spent. Additionally, the Village’s real estate market has continued to grow over the last two years, adding approximately $1B in market value to all property within the Village and increasing the number of permits for new projects and improvements. Together, these elements are evidence that many of the efforts the Village has made to improve its already-strong economics aresucceeding.

Debt Reduction

Over the past two years, the Mayor, the Village Board and the Village Manager have been working together to reduce the Village’s outstanding debt. This undertaking is one of the factors that will help ensure the Village maintains its strong credit rating, which is a key indicator of economic health and helps attract business investments. In 2016, the Village’s total outstanding debt and pension obligations exceeded $164.8MM; by the end of 2018, the Village had shrunk its debt by 17% -- down $28.7MM to

$136.1MM.

This trend is expected to continue in 2019 and beyond. While these reduction efforts and other factors continue to help the Village decrease its levels of debt, increasing revenue while decreasing expenses is another contributor to Orland Park’s overall financial health.

Village Revenue and Expenses

During the 2018 fiscal year, the Village of Orland Park’s expenses were $103.2MM while it took in

$105.3MM in revenue. By eliminating a number of full time employee positions within the Village in 2018 and undertaking a “target budgeting” process, the Village was able to end the 2018 fiscal year with a surplus of just over $2MM.This surplus shows the Village is becoming more financially sound, allowing it to begin fiscal 2019 on strongfooting.

The Village collects revenue from a number of sources, the most prominent being taxes. These taxes help support every aspect of the Village’s public resources, from recreation to infrastructure to public safety. In 2018, sales taxes were the Village’s largest revenue source and increased by nearly $57k. In the State of Illinois, Orland Park ranked 10th in sales tax revenue for 2018 and was third in sales tax per capita, meaning shoppers spent more in Orland Park than in many other parts of the state. At 9.75%, the Village’s sales tax rate is comparable to those of a number of surrounding communities, such as Tinley Park and OakLawn.

Sales taxes afford the Village an opportunity to reinvest in the Village’s parks and roads, especially as it moves to restructure its economy to grow beyond traditional retail and incorporate a number of other industries. In 2018, the automotive and food/beverage industries were the top two drivers of sales tax, resulting in more than $10MM in revenue for the Village, or roughly half the total sales tax collected in

2018. The Village will continue working to attract and grow investments in these industries to support the community’s desire to purchase from these businesses.

One of the Village’s largest expenditures is its annual contributions to multiple retirement funds, with the largest contribution going to the Police Pension Plan. In total for fiscal year 2018, the Village contributed approximately $6.9MM to pension funds; just over $3MM, or 30% of pensionable salaries, to the police pension fund. As Illinois State Statutes govern the Village’s contribution levels to the Police Pension Plan, the annual budget is developed to ensure those contribution levels are met on an annual basis.

While sales taxes are the largest source of revenue for the Village, they are not its only source of income. A strong real estate market, supported by increasing home and building values, ongoing projects and appropriate property tax levels is an additional indicator of economic strength.

Real Estate

The real estate market in the Village of Orland Park has continued to strengthen in recent years. Since 2015, the market value of property in the Village has increased by $1.2B, while the tax rate has fallen from 0.714% to 0.595%. In addition, the number of building permits issued in the Village has increased by 16% since 2016, showing the real estate market has an ongoing appetite for new construction and improvement projects. While a number of factors contribute to the success of the Village’s real estate market, the ongoing record of safety and security makes it an attractive place to build a home or a business. In 2018, crime rates were at the lowest point since 1994 and the Village’s violent crime levels were the lowest in Illinois for municipalities of more than 50,000 residents.

As any business owner or head of household knows, lowering your debt and bringing in more money than you spend are key to ensuring long-term financial success. The 2018 CAFR shows the Village is continuing to strengthen its financial position by adopting this strategy. As the Mayor and the Village Board look to the future, these principles will remain top of mind as the Village continues working toward long-term financial success.